Displace modifier does not work in 2.81
You are trying to use a brush texture as a displacement texture. That does not work.
If you want to use a texture to displace the object, you need to create one by clicking the &quot;New&quot; Button in the Displace Modifier and then change the settings in the texture menu. Easy to reach with the button to the right.

THERE you can change the texture. This does NOT work with nodes.
Keep in mind: The Texture system in Blender is End-Of-Life and will be replaced at some point with a node based approach. (afaik)